Small business tax help website

Am I Self Employed?

When filing a tax return, a taxpayer needs to know if he or she can be classed as a self employed taxpayer or not because a self employed taxpayer can be subject to more tax resulting from self employment. You can be self employed even if you are also an employee and receiving W-2 from your employer.

Am I self employed? Am I classed as self employed?

You are generally self employed if you:

  • carry on a business or trade as a sole proprietor
  • are an independent contractor
  • are a member of a partnership or
  • are in business for yourself in any way
What activities qualify me as self employed?

If you are engaged in a business or any activity whose primary purpose is for income or profit and you are involved in that activity or business with continuity and regularity, then you are self employed. You can be considered self employed even if you don't have a business but your activity falls under activities for self employment.

I have not incorporated my business, am I self employed?

If you own a business but you have not incorporated or formed a partnership then you are a sole proprietor and your business is called a sole proprietorship. You are self employed according to the IRS definition of self employment.

I am an independent contractor, am I self employed?

Yes, an independent contractor is self employed and is usually a sole proprietor.

I have a side business and a full time job, am I self employed?

Yes, your side business classifies you as self employed whereas your full time job will earn you a W-2 as an employee. You must report the side business income as self employment income and pay appropriate self employment tax.

Do all self employed people have to pay self employment tax?

No, not all self employed individuals need to pay self employment tax. If the income from self employment is less than $400, then the self employed individual does not even need to file a tax return if there is no other reason to file.